Monthly Archives: April 2018

How the Trump tax cut is going to cannibalise itself

As the Fed is slows US Treasury bond purchases, and doggedly pursues its policy of tapering, thus driving up interest rates, 58% of Treasury securities held by the public will be maturing over the next four years.

This means that the US Treasury will be rolling over a huge amount of debt into a higher-interest rate environment. The benchmark 10-year U.S. Treasury Note has moved from a yield of 2.06% (November 9, 2016) to over 3% now.

Mortgage rates correlate to the 10-year Treasury and they have moved up significantly since last September, causing a slowdown in home sales with knock on effects on consumer spending on durable goods. This will impact Treasury revenues.

Meanwhile, Trump’s trade war with China will at least put a dampener on East Asiatic demand for Treasuries for the foreseeable future, and there will be little promise of respite from those quarters for Treasury securities markets, ensuring upward pressures on rates and yields.

All this has to be understood in the context of what the May 3, 2017 General Accountability Office (GAO) report on the U.S. government’s fiscal outlook said about the impact of interest rates on the Federal Budget:

“While health care spending is a key programmatic and policy driver of the long-term outlook on the spending side of the budget, eventually, spending on net interest becomes the largest category of spending in both the 2016 Financial Report’s long-term fiscal projections and GAO’s simulations.”

While it has been clear since 2011 that the Fed has been aiming at a programme of tapering its quantitative easing programme and reversing it in order to “normalise” its balance sheet, the Trump tax plan itself will make it impossible for the Fed to respond counter-cyclically  to worsening economic performance, in view of the historically unprecedented fiscal deficits that will result from this plan.

The irony of this situation is that the Trump tax plan was in part intended to disguise and offset the effects of Fed tightening. But it clear from the above that it will consume itself. It is remarkable that the US Treasury, unlike Trump officials and GOP luminaries, stayed silent on this policy, unwilling to issue any reports or statements whatsoever on one of the biggest tax giveaways in history.

The joke continues to be on the average American citizen.

As client of the régime, Russia is compelled to cover up Assad’s atrocities

I have consistently maintained that Assad is an unreconstructed tyrant in the traditional Arab mould whose mentality Westerners, especially those well-intentioned souls on the left supporting him, are completely unable to fathom.

Assad’s theatricals, staged with the help of the Russians and involving the apparent disposition of a stock of chemical weapons in 2013, were intentionally planned as cover for subsequent gassing campaigns which could then be blamed on rebel forces.

As Gilles Dorronsoro writes in Lobelog: “Why does the régime resort to gassing? The question matters because it conditions the response due the Syrian régime in the longer term. One argument frequently heard for holding the régime blameless is the lack of a military rationale for attacking with gas, because the insurgent pocket was destined to fall in any case.

In fact, the attacks with gas above all send a political message to Syria’s own society and to Westerners. If the latter look the other way, they discredit themselves: recall how the Obama administration’s refusal to intervene changed the dynamics of the war and helped pull a régime on the verge of collapse back from the brink. If they act, they polarize the situation, solidify the regime’s alliance with Russia and Iran, and, come the next chemical attack, will only confront their own impotence.

Hence, the bombings ordered by Donald Trump in 2017 after the Khan Shaykhun chemical attack obviously did nothing to deter the régime. In addition, Bashar al-Assad sends a message to his population. You are alone, there is no limit to what we can do: gas attacks on civilians, rape on a massive scale, torture (with hundreds of thousands of victims, and tens of thousands of them killed), systematic bombing of hospitals, and the list goes on.”

Gilles Dorronsoro has just published an in-depth sociological survey of the Syrian Civil War with Adam Baczko and Arthur Quesnay, with Cambridge University Press.

We also find Robert Mackey writing for The Intercept on recent events at Douma that it was very odd that the Russians were propagandising at the Hague, using 11-year old Hassan Diab, before the OPCW had finished the investigation, which had been inexplicably delayed by the Russians, ostensibly while preparing the ground for the new set of theatricals.

“When Hassan told Russian state television last week that he had been given sweets in return for taking part in the filming of the video in the hospital, and his father said that the boy had been doused in water for no reason, since there was no sign of any chemical attack, Russia’s United Nations ambassador announced plans to screen the interview for the Security Council.

However, Russia has failed to acknowledge concerns that the boy and his father might not have felt free to accurately describe what happened, given that the interview was filmed at a Syrian army facility used by Russian military advisers. Former colleagues of the Douma hospital workers told The Guardian that Syrian officials had subjected the medics to “extreme intimidation,” threatening to harm their families if they made any mention of chemical weapons.

When they arrived in the Netherlands on Thursday, Hassan and the medical workers were first taken to the headquarters of the Organisation for the Prohibition of Chemical Weapons, for a presentation of Russia’s case that the attack was a hoax.

During the presentation, text on a screen behind Russia’s ambassador to the OPCW, Alexsander Shulgin, described the footage shot in Douma’s hospital on April 7 as “Fake Video” produced by the volunteer rescue workers known as the White Helmets.

Since the video was in fact shot by another group, the activists who run the Douma.Revolution Facebook page — and the images used by Russia include their logo — it is unclear why Russian officials insist on attributing the footage to the White Helmets. One possible explanation is a pre-existing campaign to demonize that group, which receives funding from Western governments and has documented the aftermath of Russian air strikes on rebel-held areas.

Russia had ignored a request from the OPCW to allow its inspectors in Syria to interview the witnesses first, and wait until after the investigators had filed their report to present its theory of the case. When the Russian briefing went ahead, it was denounced as “a crude propaganda exercise” by 17 nations that boycotted it, including the United States, Britain and France. Those three countries are convinced the Syrian government did use chemical weapons, and carried out retaliatory airstrikes two weeks ago, before the OPCW inspectors had even begun their work.

The Syrian entourage was then presented to the media at a bizarre press conference in which the opposition activist’s video of each of them in the hospital on the night of the attack was projected onto a big screen behind them as they delivered prepared remarks to reporters.

Many reporters in the room expressed disquiet at the spectacle of the young boy, who addressed them for all of 40 seconds, speaking in defense of the government that has been shelling his hometown for half his life.

Perhaps the most striking aspect of the event, though, was how deeply beside the point it seemed. Witness after witness swore that there had been no sign of chemical exposure and no deaths among the patients they treated in the hospital, and Hassan’s father insisted that no one in his family had been sickened by gas, but there was no testimony at all related to what took place that same night in a nearby residential building — where activists had filmed piles of dead bodies, some with foam on their lips, and a large yellow canister identical to those used in previous chlorine gas attacks.

The exclusive focus on what took place in the hospital that night, in nearly two hours of testimony, was particularly bizarre because two different witnesses told reporters in Douma last week, on a government-led press tour, that their families had been killed by gas in that residential building.

One witness, Nasser Amer Hanen, told Stefan Borg of TV4 Sweden that he had survived the attack but lost his wife, mother and brothers to gas. When the same man spoke to Seth Doane of CBS News inside his ruined home in the building, he led the reporter to an upper floor, where the large yellow gas canister was still resting.

Another witness in Douma, Kahled Mahmoud Nuseir, told Bassem Mroue of the Associated Press that his wife and two daughters had been killed by gas in a basement shelter that still had a peculiar smell 10 days later. Speaking to AP outside Douma’s hospital, Nuseir blamed the gas attack not on the Syrian government but on the Islamist rebels who held the town until April 8. He also faulted the White Helmets for failing to save his family. Although it contradicts the Russian claim that no gas was used anywhere in Douma, and the images from the hospital were fabricated by the White Helmets at the direction of British intelligence**, video of Nuseir’s AP interview was obtained and posted online by Press TV, an English-language channel owned by Syria’s ally Iran.”

However, given that scepticism about the Douma justification for the launch of missiles by the US-UK-French trio would reach Tucker Carlson and would become a major talking point of his on FOX NEWS, of all TV stationsRussian information warfare seems to be succeeding in spades in undermining the credibility of Western intelligence services. If the Iraq War hadn’t done the job of burying that forever, the inexplicable lies of the UK government over the Skripal case should have hammered a final nail into this particular coffin. The Russians are driving their advantage home. They are possibly better liars than the Americans and the British.

** N.B. The White Helmets are an operation funded by the UK and US governments, and directed by their intelligence services, although acknowledging this does not absolve Assad of his crimes nor Russia of the crime of covering up his crimes.

Syria: Not a Civil War but a War on Civilians

Muhammad Idrees Ahmad writes: The regime’s crimes are colossal, sustained, and deliberate; they are an expression of policy. The opposition is disorganised, anarchic and diffuse. Its crimes are impulsive, contained and chaotic: They reflect only on the group or individual committing the crime. Russian vetoes to protect specific regime violations have created a general climate of impunity where criminality thrives. This has to be reversed.

Yet the language of “both sides” and “no good guys” has created an artificial levelling where a largely peaceful uprising is placed on the same moral plane as the murderous regime that forced it to militarise.

To be sure, the regime’s ruthless campaign against the civil uprising has left a vacuum filled by many unsavoury groups. But the people who remain unvanquished in the face of a genocidal regime aided by two major powers is unlikely to be cowed by Al-Qaeda.

Indeed, since 2016, Syrian towns like Ma’arat al-Nu’man, Saraqeb, and Kafranbal have seen regular protests against both the regime and Al-Qaeda. Some towns have successfully expelled the jihadis and protests against Al-Qaeda are happening in Sarmada even as I write.

What we see in Syria is not a “civil war”, but a war on civilians. The label “civil war” suggests a kind of parity in a contest that is anything but equal. In Syria the battle has often been waged between high-altitude bombers and hospitals; between barrel bombs and playgrounds.

“To confuse [perpetrators] with their victims”, said the great Italian writer and Holocaust survivor Primo Levi, “is a moral disease or an aesthetic affectation or a sinister sign of complicity; above all, it is a precious service rendered (intentionally or not) to the negators of truth.”

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The Kingmaker and the snap Turkish election

 

Devlet Bahçeli is the “kingmaker” of Turkish politics. It was Bahçeli who called for early elections back in 2002, paving the way for the Justice and Development Party (AKP) to come to office.

In the aftermath of June 2015 parliamentary election, in which the AKP failed to garner a sufficient majority to form a government, it was Bahçeli who rejected calls from other opposition parties to set up a coalition government, calling for early polls instead. In the November 2015 election the AKP increased its votes, and secured a parliamentary majority.

Subsequently, Bahçeli’s political profile grew substantially after the July 2016 coup attempt. On Oct. 11, 2016 he openly announced his party’s support for the AKP’s ambitions to change the administrative system from a parliamentary to an executive-presidency model. An AKP-MHP alliance narrowly won the constitutional referendum of April 16, 2017.

In early 2018, Bahçeli once again took the stage by declaring that the MHP will not present a candidate for the presidential race and instead will back President Erdoğan’s nomination, forming a new alliance, in light, on his view of the critical security situation Turkey faces at the centre of a collision between America and Russia in Syria.

Now that he has called for new snap elections, bringing forward the next presidential election from November 2019, after Erdoğan’s apparent refusal to contemplate such a move, Bahçeli secures Erdoğan’s agreement. However, the swiftness of the response and the very early date for the new election (June 2018) suggests Erdoğan was in on the idea from the start.

Both Erdoğan and Bahçeli are impatient to begin legislating for the new structures of governance under the presidential system, to consolidate Turkey’s transformation into a state capable of resisting the pressure and interference of foreign powers dogging its political system since 1947. Basically, the reason for the snap election is to wrong-foot Western powers and avoid election interference, which is what Binali Yildirim means when he says that there are ‘geopolitical reasons’ for advancing the election date.

Controversy dogs these elections due to the emergency laws in place at the moment as a result of the Turkish government’s crackdown on the Gülen movement. For the EU in Brussels, this is a civil society movement with a right to free expression, whilst for the Turkish government it is a cult (FETÖ) guilty of high treason in virtue of an attempted violent coup against the state and democratic institutions. For the EU, the state of emergency amounts to the Turkish government acting outside the rule of law. For the Turkish government, an attempted coup d’état is a supreme example of disrespect for the rule of law and warrants sanctions against all suspected members of the Gülen organisation.

The position of the EU is principally sustained by the German government, which has granted asylum to leaders of the Gülen movement, and has instructed the Greek state not to extradite other Gülen elements to Turkey, which escaped to Greece after the coup.

The overall position of the German government against the current Turkish government’s policies, however, pre-dates the attempted coup, and goes back to 2005 when the Merkel CDU/CSU landslide election victory over the SPD would lead to new policies towards Turkey and the rejection of its attempts to improve its trading position and renegotiate the essentially neo-colonial framework of the European Customs Union, by entering the EU as a full member.

The important role the German Marshall Fund of the United States (GMFUS) and the Axel Springer Group played in Merkel’s rise should have been warning to the Turks that their non-cooperation in the Iraq War was going to be considered by the US establishment as unforgiveable treachery.

Furthermore, this would have to be understood in the context of the campaign launched by the US through GMFUS beginning in 2004, to combat the anti-Americanism that had taken a strong hold on European public opinion, after France’s and Germany’s (under the SDP) own opposition to the Iraq War.

 

 

Nearing the last stage of the Trump Presidency?

Adam Davidson writes: This is the week we know, with increasing certainty, that we are entering the last phase of the Trump Presidency. This doesn’t feel like a prophecy; it feels like a simple statement of the apparent truth. I know dozens of reporters and other investigators who have studied Donald Trump and his business and political ties. Some have been skeptical of the idea that President Trump himself knowingly colluded with Russian officials. It seems not at all Trumpian to participate in a complex plan with a long-term, uncertain payoff. Collusion is an imprecise word, but it does seem close to certain that his son Donald, Jr., and several people who worked for him colluded with people close to the Kremlin; it is up to prosecutors and then the courts to figure out if this was illegal or merely deceitful. We may have a hard time finding out what President Trump himself knew and approved.

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Who is who in Syria and the problem faced by Turkey

Barçın Yinanç writes: A few days before the Turkish Armed Forces entered Afrin’s city center, video footage was all over the Turkish press showing how the Syrian Kurdish Democratic Union Party (PYD) was stopping civilians trying to leave the city. This was shown as evidence that the PYD, which is considered the Syrian arm of the outlawed Kurdistan Workers’ Party (PKK), would use civilians as human shields in the anticipated urban warfare.

In the end, the PYD retreated from the center of Afrin and the urban warfare expected to take place with the Turkish army did not occur.

But this video footage remained as proof showing the city’s civilian Kurdish population’s wish to leave and in fact, those who found a way, left.

That brings us to the Turkish government’s first challenge. The Turkish government has been telling all regional and international actors in Syria that demographic engineering through ethnic cleansing should be avoided. Yet, while talking about “cleansing the PKK from the Turkish-Syrian border,” the Turkish government risks contradicting this position if civilian Kurds fleeing armed conflict do not return in fear of reprisal from the Free Syrian Army (FSA), or simply in fear of the presence of the Turkish army.

According to diplomatic sources, the representatives of the Kurdish population in Afrin have told the Turkish government that after having suffered for decades under the oppression of the Bashar al-Assad regime, and after having been subjected to similar oppressive rule by the PYD in the course of these last couple of years, they do not want to come under the oppressive rule of “Sunni Arabs” this time.

Therefore, the challenge for Turkey will be to make sure to separate between the People’s Protection Units (YPG)/PKK and the Syrian civilian Kurds, in addition to securing the return and guarantee of the rights of the latter.

Who is who among the Sunni groups

The second challenge is one posed by the Damascus-Moscow-Tehran trio. Supported by Russia and Iran, regime forces have been making advances against rebel fighters. The same pattern is applied each time, which we have witnessed in Aleppo and Eastern Ghouta and which we are now seeing in Douma. There is extensive bombing, including on critical infrastructure like hospitals, use of chemical attacks to further intimidate locals and then an offer to exit for those who want to leave.

Turkey undertook a cross border military incursion against the PKK in Syria, thanks to the green light from the Russians, but that came at the expense of regime attacks against the opponents, which started to flee towards regions under the control of Turkey, like Idlib and Cerablus. Ankara’s protests and numerous telephone calls between Russia and Turkey at the highest level did not stop the Russians’ strategy to push regime opponents toward Turkish controlled areas.

This brings us to the second challenge for Turkey, on identifying who is who among those fleeing towards Turkish controlled areas. You have a civilian woman whose husband is affiliated with Ahrar al-Sham, a brother who was a former member of the al-Nusra Front, an uncle with the Islamic State of Iraq and the Levant (ISIL) and a brother-in-law with the FSA.

Then there is the challenge of Foreign Terrorist Fighters (FTF). From Tunisians to Germans, from Moroccans to French, all are asking their Turkish counterparts what will happen with the FTF. Where will they go? Certainly back to their country of origin? And obviously they will pass through Turkey. Already, several diplomatic missions in Turkey are busy dealing with the FTF and their families; the ones who knock on their door but also who do not knock.

Those who do not want to return, like the Chechen and the Uyghurs, what will happen to them when their room to maneuver becomes limited in Syria? Will they find it easier to penetrate Turkey and become deadly lone wolves? Thanks to the military campaign, the PKK may now have limited capacity to use Syria as a launching pad. Will it be the same for the radical jihadists?

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